Over the past few years, Intel has been paring down many of its diverse business operations and technologies that while interesting, represented non-core and non-strategic opportunities. This process started with the previous CEO, Pat Gelsinger, but this has accelerated in the past several months as new management headed by Lip-Bu Tan has focused on even wider business cuts.
Many technologies that were not all that strategic to its main objectives have been sold off or shut down as the company refocused to try and bring its core businesses back to a market leadership position. And while this shedding of businesses and technologies can be seen as a setback for Intel, in reality it seeds the marketplace for some new companies that could generate some significant revenues, or at the very least add significant revenues to companies that acquired or will in the future acquire some of these Intel assets. It also enables new technologies to be provided to the market that might not be feasible under the Intel umbrella, and that is ultimately a benefit to the marketplace.
Some of the divestitures were high profile, like Mobileye and its pursuit of the emerging autonomous vehicle market which has yet to fully materialize, or Intel’s smallish NAND memory business sold of to SK Hynix for incorporation into its wide ranging memory solutions. Not all of Intel’s business cast-offs have gone to large companies and like Mobileye, are now operating as independent enterprises. Indeed, as Intel downsized and eliminates some non-strategic businesses, entrepreneurs are taking those businesses that generated some unique technologies and making a go of establishing independent companies.
Here are snapshots on two examples of Intel spinouts that have emerged as successful independent operating companies.
Altera FPGAs
Altera was acquired by Intel in 2015 as a way to advance its networking and particularly its telco networking business since PFGAs were a great way to advance 5G solutions. Altera also provided a potential acceleration for specific AI functionality in specialized systems and solutions as an adjunct to GPUs.
But neither Telco nor AI provided enough of a business opportunity for Intel to maintain a large organization like Altera, and particularly as Intel fell behind in the AI market now dominated by others. As a result, Intel made Altera an independent company in 2025. Intel did keep some core technology for use in its future products, but that capability did not require maintaining the entire Altera operation and its operational overhead. AS a result, Altera is now able to fully support a wide range of customers that previously it may not have been able to.
Cornelis Networks
Cornelis Networks is a prime example of leveraging a growing market need for high speed interconnectivity in AI solutions. Spun out of Intel’s OmniPath networking business, Cornelis is now focused on providing high speed interconnect technology from chips to switches, and ultimately competing for the efficiency crown in networking that can dramatically increase throughput by 20% or more. Cornelis will enable doing more with less in large scale clustered systems by allowing smaller scale clusters to produce the same output as larger ones. While still proprietary in nature, it is moving towards a non-proprietary solution to enhance its existing products.
The move to high speed open standards like Ultra Ethernet has provided an opportunity to compete against the established proprietary AI and HPC switch vendors, and with substantial backing and guidance from previous Intel execs like Lisa Spellman now in charge of the company, it has a path to share in the high growth trajectory of the AI market – something Intel was not able to accomplish with this business.
These examples show how Intel’s troubles have led to spin outs that have become successful operations once the burden of Intel business restrictions have been lifted. There are other such examples, and no doubt there will be more as Intel continues to shed non-core businesses as it returns to its roots and works to strengthen its market position.
Looking at Intel divestitures only as a market failing ignores the fact that while these businesses may not have ultimately been valuable to Intel in its current operations, they do create an opportunity to grow viable and successful companies. And this ultimately benefits the entire marketplace.